Should High Income Earners Have Access to Personal Grievance?

18 April 2024

The Minister of Workplace Relations agenda includes a proposal to block high earners from being able to raise a personal grievance under the Employment Relations Act 2000, as was the case prior to the Employment Contracts Act 1991.

Australia currently has a high-income threshold set at $167,500.  Employees earning above that figure are not able to raise an unfair dismissal claim under the Fair Work Act 2009 (Cth).

One may well ask what is the purpose of proposing such a change here?

If the intention is to reduce the costs of dealing with personal grievances for high income earners, the reverse outcome is more likely.

If employees are prohibited from raising a personal grievance under the Employment Relations Act, their only option will be civil litigation for breach of contract or wrongful dismissal.  As we all know that is a costly process which can take a high financial and emotional toll on all parties involved.

We have advocated from many years that the best way to simply claims for unjustified dismissal would be to have statutory notice periods of varying lengths depending on the level of seniority of the employee, say Band 1 ($180 - $199k) at 4 months’ notice, Band 2 ($200k-$249k) at 5 months and Band 3 ($250k and over) at 6 months.

The above comes at a cost that may in some circumstances may be avoidable, but at least the cost would be known and it would be a relatively simple matter to end an unsatisfactory relationship without incurring all the time and legal costs involved with the current system. Arguably a similar arrangement could be extended to employees on lower income levels.

In our view, setting a high-income threshold will cause more time and cost for both parties than the current system.

For more information contact: Tony Teesdale 021 920 323, Justine O’Connell 021 920 410, Michelle Battersby 021 993 735, or Esther Cohen-Goh 021 178 4111